Glenover will supply raw phosphate rock in the form of flotation concentrate from its project in Limpopo Province, South Africa.
The deal comes in conjunction with the acceptance by South Africa’s Department of Mineral Resources of Glenover’s application for a mining right. Glenover has now commenced the requisite environmental impact assessment programme.
On successful grant of the Mining Right, Galileo will increase its beneficial interest to 38% in the Project
The Heads of Agreement are subject to the parties entering into a definitive supply agreement and otherwise terminate on 30 April 2018.
In addition, the buyer still requires further pilot scale work to determine the suitability of the phosphate rock in its process as one of the main conditions precedent, but further capital expenditure for the second phase pilot scale test work will be subject to the parties agreeing on the main commercial terms in the Heads.
The buyer will purchase Glenover phosphate rock (33% P2O5) at international market prices.
"Galileo and JV partner Ferminore have been in discussions with various interested groups concerning the development of the project,” said Galileo chief Colin Bird.
“One group has already carried out extensive bench scale testwork and on this basis has entered into a preliminary offtake agreement, with pilot scale testing remaining the main hurdle to a binding agreement."